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SafeMoon US, LLC has filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Utah, signaling an end to a process fraught with uncertainties. This development follows a period of legal challenges and significant market turbulence that has beleaguered the company.
Additionally, SafeMoon’s native token, the SFM token, experienced a dramatic 14% drop in value, trading at all-time lows in the first 24-hour period following the announcement of the bankruptcy.
SafeMoon Now Farther from the Moon
The financial difficulties within the company are evident in the bankruptcy filing, which highlights liabilities ranging from $100,001 to $500,000 and estimated assets between $10,000,001 to $50 million. These figures point to a grim scenario of mismanagement specific to SafeMoon and the consequences of the legal proceedings.
Last month, the US government charged SafeMoon executives Braden John Karony, Kyle Nagy, and Thomas Smith with securities fraud and money laundering offenses.
According to the statement by the United States District Court, Karony is accused of defrauding victims of millions of dollars for his personal gain. The court describes Karony as a “serious flight and danger risk to the community.” An alert was also raised about the individual due to his international mobility and access to global crypto assets, which poses a potential risk of evading justice.
SafeMoon CEO Charged with Fraud
Karony’s behavior, thought to have caused investor losses of over $300 million, has cast a shadow over SafeMoon’s operations. A letter presented by the government to Judge Eric R. Komitee of the Eastern District of New York emphasizes the seriousness of the allegations. The letter states:
“When confronted with public statements questioning the legality of SafeMoon’s actions… [Karony] doubled down on his fraud by lying to investors.”
The emergence of this bankruptcy announcement has plunged market observers into deep pessimism. The bankruptcy filing and ensuing legal troubles have further destabilized SFM’s value, highlighting the inherent risks in the cryptocurrency market.
